Your local library probably carries a variety of books and programs you can try. I would give each a try until you found something your child liked.My dd was not interested in reading till she was older,and even now we are still working on the basics.
I have gone with the phonics approach for the most part,though there are some words she knows just by sight due to repetition.Our local schools also mix sight words and phonics.You can get cards and workbooks at the dollar store that might interest your child.And just reading each day will help as well.
Ya know, we've done nothing but read to DS. We read picture books and novels each day. He's messed around with some TVO (our PBS) preschooler video games from their website and now he's reading. It really required no teaching on our part - just lots of reading. I think when they're ready they just crack the code. Just the same as what happened with speaking.
Is your little one asking what everything says? Asking to have you spell everything? Spelling nonsense and asking what it spells? Not all kids will do this but those were definitely a sign DS was working the whole reading thing out. The only thing we did was say "cool!" when we'd be at the store and he'd figure out the sign above the toy section (WHY do they have those at the grocery store - such drama can ensue?!) says "kids."
I know from my teacher friends that if you feel you have to teach reading it doesn't matter which approach you use, kids will pick it up in spite of the method. They can't really say what happens, just that it does.
A preschooler I wouldn't try to teach to read.....most pre-schoolers brains aren't ready yet.
But I would expose him to reading, lots of it. I would play rhyming games. Pointing out signs and sounds. Introducing letter sounds. Preschool is the time for the prep-work. http://nrrf.org/84_ltrs_phnmc_aware.html
This book might be helpful to you.
The Ordinary Parent's Guide to Teaching Reading
by Jessie Wise, Sara Buffington
and starfall.com might help expose your child to the basic.
3 unschooled Dumplings of mine: ElderSon taught himself to read at 3, was reading adult books by 8. Dd taught herself to read at 7-8, now at 11 reads any level. Ds at 10 can hardly read at all, due to learning disabilities and various special needs. I read to all of them about a hour or 2 each night (still do to the younger ones) and the house is always full of books. Every child is different. I think reading comes as naturally as walking or talking, when a child is ready and if they are exposed to the possibilities. I would not push it with a preschooler untill they expess a strong interest. Even then, I would mainly answer their questions, rather than set up a formal class that may take the joy out of reading.
I would have never thought about teaching a preschooler to read, until my dd started begging me to help her. But, she hates being told what to do so we had a dilema. What saved us was one, getting all the Leap Frog videos from the library. They taught her the background concepts. Now she constantly asks how to spell words, she'll rattle off letters and ask what they spell, she writes her own stories (lots of odd letter combinations, but she's working on it). We read together a lot. Sometimes when we read together I skip the words I know she knows and let her read them. We're pretty relaxed about it, but it is working far better than me trying to sit down with a formal program with her. As soon as there is a right or wrong answer she shuts down and gets defensive, by playing with words and letters she is learning so much better.
My son is an odd one. He loves/is good at logic and math type stuff. He's 4 too and wanted to learn to read so he could read his own books quietly to himself in his own room sometimes. He's still not "fluent" in reading, but we did come up with some stuff that's working for him. I agree completely that Leapad is a good system. My son loves it since he can "read" his own books on his own. He also likes Reader Rabbit computer games and is always begging to play them. We also came up with a game he likes to play. I got a jar of letter tiles from Walmart or some such. I started out just using them to play a game of matching the letters (the jar has about 200 in it so lots of duplicate and small/capital letters). basically you take turns turning over 2 at a time to get used to the letters. I figured it would be a good way to get him used to his alphabet. Recently he started learning to spell his name using the tiles. Capital letters seemed to work best. He actually started a variation on this himself though and made it into a game. He took the tiles we used for his name and started trying to make other words. He made (and read) the word rain by himself without any prompting or help from me yesterday. He has a hard time saying words clearly so this is a great way for him to play with letters and words. I don't expect him to know how to read and didn't push it especially since I didn't learn to read/write until I was almost 8 (dyslexia). He just found something he wanted to do and it seems to work for him. He amazes me sometimes.